Against the advice of YarrowBay, the Black Diamond City Council has accepted a plan for building its future government facilities. In response, the developer said it will file a lawsuit against the city.

“We counseled against them adopting the plan because we feel there are errors,” said Megan Nelson, director of legal affairs for YarrowBay. “It leaves us no choice other than to litigate with the city over the issue. We find that to be very unfortunate.”

Nelson asked the city not to adopt a resolution during an April 3 City Council meeting for a more than $48 million government facilities mitigation plan. Though the city has accepted the plan, it has not yet taken a step to adopt the mitigation fee recommendations.

The mitigation plan assesses what government facilities will be needed to support the expected population expansion that comes with the Villages and Lawson Hills master planned developments that are projected to increase the city’s population from around 4,000 to approximately 19,200 during the next 20 years.

A mitigation fee is a one-time payment assessed on each unit of new development; the city uses the money to ease the impact of the development on government facilities.

The city hired consultant MAKERS in April 2013 to perform a study on the city’s government facilities needs and the findings were presented Feb. 27. The study addressed City Hall, the police department, municipal court and public works facilities. The fire station is covered under a separate process and is not included.

MAKERS found that the existing government facilities are generally too small to accommodate the current needs, let alone future growth. The firm also said the city staff and council chambers being in separate buildings is inconvenient and inefficient.

After touring eight city halls, police stations and public works shops, MAKERS concluded Black Diamond was most comparable to the city of Bonney Lake and would eventually need 93 additional employees.

The interim mitigation fee set by YarrowBay was $1,750 per single family dwelling, $900 for multi-family homes and $1.50 per square foot for commercial construction.

The MAKERS study recommended fees substantially higher: $5,803.15 for both single and multi-family dwellings and $2.77 per square foot for commercial.

Nelson urged the council against the resolution because the study was “flawed” and violates state law and the city’s comprehensive plan.

YarrowBay believes the main flaw is that the fee needs to be citywide. Instead, YarrowBay believes MAKERS only calculated the fee based on the addition of the Lawson and Village Hill developments.

MAKERS explained in its documents to the city that the plan is citywide because future government facilities will serve the entire city, not just the new development.

“The population and dwelling unit forecast is the citywide total, regardless of where the development actually occurs,” MAKERS wrote in its plan. “The location of development has no effect on the size of City Hall or the public works facilities.”

The second flaw, according to Nelson, is the study calculates a “gap analysis,” which basically shows that Black Diamond underserves its residents with its current general facilities structure.

“Instead of applying a credit in the fee, they charged that to new development, which is illegal under Washington state law,” Nelson said. “They can’t force new development to pay existing deficiencies within a municipality.”

Colin Lund, YarrowBay chief entitlement officer, wrote in emails to the city the plan and fees appear to be “without basis and unlawful,” with many assumptions in the plan appearing to be incorrect, such as that average square footage for residences would jump from 1,861 square feet to 2,095 square feet.

“We are skeptical of these figures and no evidence has been presented to demonstrate their accuracy,” Lund wrote.

Lund added the fee proposal is disproportionate because it ignores other sources of funding, such as increased tax revenue that will accompany new development, and also “ignores the fact that the plan appears intended not just to serve the future city, (but) to cure significant existing deficiencies in the city’s current facilities.”

The comprehensive plan agreement timeline required the study be completed within 12 months of the commissioning. If not adopted within three years, YarrowBay’s obligation to pay the mitigation fees would be voided.

The city took the position that if the plan is required to be finished within a year of the study being commissioned that the plan must also be adopted within that time frame.

YarrowBay told the council at meetings and issued written statements to the city saying that such a rush was not necessary and that adoption was not needed for three years.

“I’m not really sure why they decided what they needed to do,” Nelson said. “It made sense to us to work through what was pointed out by YarrowBay and the public.”

When contacted about the issue, Black Diamond City Attorney Carol Morris said, “everything I have to say about that is in the ordinance.”

The resolution stated, “Regardless of the developer’s attorney’s representations, the city does not wish to waive any argument or defense that it may have to the developer’s future argument that the language in the development agreements with YarrowBay required the city to adopt the General Government Facilities Plan before April 3.”

When asked for clarification, City Administrator Christy Todd said the city is reluctant to do anything that wavers from the language.

“We were following through based on language of that agreement,” she said.

The council — minus an absent Ron Taylor — unanimously approved the resolution. Councilwoman Janie Edelman declined comment and Councilwomen Carol Benson and Tamie Deady could not be reached for comment.

Nelson said she was disappointed and surprise by the council’s unwillingness to work cooperatively with YarrowBay.

“Instead of taking the opportunity to work through those errors, they decided to jam through with the plan, which leaves us no other option other than to litigate,” she said.

Todd said the city separated the fee from the plan and the fee will be discussed in June. Todd said YarrowBay’s fee was a “placeholder” and not based on any study. She said she was impressed by MAKERS’ thoroughness and that any current issues will be “worked through in the coming months.”

When asked about the possibility of a lawsuit, Todd said the city can’t control YarrowBay’s decisions.

“It would be unfortunate, but threats of litigation aren’t helpful,” Todd said. “We can’t control who files lawsuits against us, unfortunately.”

Another area of contention is the size of the new proposed building space. MAKERS wrote a general planning standard for administrative uses is 250 square feet per person. The consultant said that is the approximate space provided when approximately 14,000 square feet of “special spaces” for things such as holding cells, evidence storage and council chambers are excluded.

YarrowBay calculated that the 95,000 square foot City Hall would accommodate 380 employees if each gets 250 square feet per employee.

“Even if we assume only half the new building is office space, the city would have room for 190 employees,” Lund wrote. “This appears excessive.”

Nelson said the city has decided to purchase the “Taj Mahal of City Council chambers and police station,” as opposed to YarrowBay’s more conservative estimate.

“The desires that are put forth are inflated,” she said. “So if you inflate the size of the buildings you want and the quality of the facilities you want, all those things will drive the much higher fee.”

When asked whether this could be a ploy to drive away potential builders, Nelson said, “There is definitely that possibility. Part of the calculus a builder makes when deciding upon the jurisdiction is the cost of building there.”

Nelson said the developer will try to overturn the plan with the lawsuit and believes this disagreement will result in a waste of taxpayer money.

“We do believe it’s a waste because both YarrowBay and city are forced to pay litigation fees that are totally unnecessary at this time,” she said.

Though Nelson said no lawsuit has yet been filed, that it will be “moving forward sooner rather than later.”